When you’re looking for a home, one of the most important things you should do is to try to get the best financing rates, as this will help you save thousands of dollars over the term of the loan.
In order for you to get the best financing rates, you need to have a strategy. Here are a few tips that can help you secure the lowest mortgage rates:
Get in touch with different financial institutions
Interest rates vary with every financial institution. In an effort to entice more borrowers and generate more purchase loans, mortgage lenders offer new loan products and better mortgage rates. In order for you to find the best rates, you need to widen your search by getting in touch with regional banks, credit unions, national banks, direct lenders, or community banks.
Do some research
Most real estate agents will recommend a mortgage lender they trust or have previously worked with. While these may turn out to be excellent recommendations, you need to look at other alternatives so you can compare interest rates and negotiate the best deal. Thankfully, getting in touch with mortgage lenders is not too difficult – you can contact them by phone, online, or in person.
Interview the lenders
Once you have a list of lenders with the best rates, it’s time for you to make your choice. Take note of lenders who get back to you in a timely manner after you’ve contacted them. See which of them asks about your financial situation, and pay attention to those who can answer all of your questions clearly. You want a lender who can completely understand your financial concerns.
Improve your credit score
Some lenders will charge higher interest rates for borrowers with low credit scores. This means you’ll have to raise your score in order to get better rates. Most conventional lenders require a credit score of at least 620 to 640. If you’re looking for the best terms, you’ll need a credit score of 740 and higher.
Provide consistent information
When you shop around for the best rates, be sure you provide all lenders with consistent information such as:
- Details about your property
- Quality of your credit
- Amount of down payment or home equity
It’s also important to remember that mortgage rates fluctuate, so the rate you get may not be the same as when you got the quote.
Decide on when to close
It’s a smart move to ask lenders what they charge for various lock-in periods, as this can affect your mortgage rate. It’s important to tell your lender when you expect to close, as you may end up with a higher interest rate than what you expect.
Have your answers ready
If you want to get an accurate rate quote, you have to be prepared to answer a few questions. You need to be ready to answer questions such as:
- Are you buying a condominium, townhome or single-family home?
- Are you planning to waive escrow and deal with taxes and insurance yourself?
- How big is your down payment?
Contact different lenders on the same day
In order for you to compare the best mortgage rates, try to call lenders within the same day, as rates tend to fluctuate.
Do you need a trusted lender? Call me at 760 622 5087 or e-mail me here.
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